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ABC Co manufactures a subcomponent at the rate of 400 per day when required. Its annual demand for this item is 50000 unites. Assume 250 working days per year. Holding cost is $10 per unit per year. Set-up cost is $150 per set-up.
Find
A) Economic production quanity.
B) How many production runs will be made per year.
C) What will be the maximum inventory level.
D) What percentage of time during the year will this item be produced
E) What is the annual cost for ordering and holding inventory
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The ABC system is a method of Managing inventory.
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